The 18-year-old singer has claimed that the former X Factor contestants don't write their own songs and feels the band 'must know they're terrible.'
Bugg told Short List magazine: "Who the f**k is saying [they're the closest thing to rock stars we have these days]? Oh, I'm pretty sure they have a good laugh. But it's easy to, isn't it? When you don't have to write any songs.
"People [call them the new Beatles] because they broke America, but that don't mean a thing. I mean, [One Direction] must know that they're terrible.
"They must know ... calling them the new rock stars is a ridiculous statement. And people should stop making it."
Jake Bugg has labelled One Direction as 'terrible'
Nottingham-born Bugg found his way on the more traditional route, trying to play at pubs that he wasn't even old enough to enter and eventually getting noticed.
He added: "Some of [the pubs] would be like, 'Don't be daft. You're 15, you're not coming in the pub. But then some places gave me a couple of slots, and people saw my face a bit more.
"I did that for a couple of years before I got signed. The crowds were hit and miss, but it gave me that experience."
Bugg will be embarking on his first UK headline tour later this year in support of his self-titled, No.1 album. For more information visit Gigwise Gig Tickets.
Full tour dates are:
October 19 - Bournemouth, BIC
October 20 - Plymouth, Pavilions
October 22 - Brighton, Centre
October 23 - London, O2 Academy Brixton
October 27 - Swindon, Oasis
October 28 - Birmingham, O2 Academy
October 31 - Glasgow, O2 Academy
November 2 - Doncaster, Dome
November 6 - Manchester, O2 Apollo
Watch Jake Bugg's new 'I've Seen It All' video below
Photos: Jake Bugg performs live at Leeds' O2 Academy